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G20's Internet economy to hit $4.2 trillion by 2016

G20's Internet economy to hit $4.2 trillion by 2016
Tim Green

by

Industry / Market Data / January 30th 2012 at 1:19PM

Saving the world from financial meltdown, let's hope.

The Boston Consulting Group says the Internet economy will be nearly double the size it was in 2010, going from 1.9 billion users in 2010 to a projected 3 billion users in 2016. That's about 45 per cent of the world's population.

Predictably all the action is coming from emerging markets, social media and - of course - the smartphone.

Indeed, by 2016, mobile devices will account for about 80 per cent of all broadband connections in the G20 nations.

Therefore, BCG makes the point that the web is no longer a luxury and the persevere of the wealthy: by 2016, nearly 70 per cent of the Internet users in the G-20 will be from emerging markets, up from 56 per cent in 2010.

China alone will have nearly 800 million Internet users - about the same number as France, Germany, India, Japan, the U.K., and the US put together.

Social media is also driving the move to emerging markets, with countries such as Argentina, Brazil, Indonesia, and Mexico ageing 90 per cent of Internet users engaged in social media.

Of course, all this activity represents huge commercial potential, with $1.3 trillion of goods being researched online before being purchased offline. That's 2.7 per cent of GDP, or more than $3,000 per connected household.

Likewise, companies that make extensive use of the Internet  to sell, market, and interact with their customers and suppliers grow faster than those that do not.

Over the past 18 months, BCG surveyed more than 15,000 small and medium-size enterprises around the world.

It found that, in the US, businesses with a medium or high Internet presence expect to grow by 17 per cent over the next three years, compared with 12 per cent for other companies.

In the UK, the overall sales of businesses with a medium or high Internet presence rose by 4.1 per cent each year from 2007 to 2010.That's about seven times faster than so-called low-Web and no-Web businesses.

"We are still only at the beginning of realising the potential of the Internet," said Paul Zwillenberg, another coauthor of the report and a partner at BCG. "To compete, companies need to strengthen what we call their digital balance sheets by building their digital assets and reining in their digital liabilities to create digital advantage."